To read this content please select one of the options below:

Internal and external determinants of banks’ profitability: The Portuguese case

Maria Teresa Medeiros Garcia (Lisbon School of Economics and Management, University of Lisbon, Lisbon, Portugal)
João Pedro Silva Martins Guerreiro (Lisboa School of Economics and Management, University of Lisbon, Lisbon, Portugal)

Journal of Economic Studies

ISSN: 0144-3585

Article publication date: 11 January 2016

4635

Abstract

Purpose

The purpose of this paper is to analyze the profitability of 27 universal banks in Portugal over the period from 2002 to 2011.

Design/methodology/approach

The paper conducts ordinary least squares estimations with fixed effects using three measures of profitability: the return on average assets, the return on average equity and the net interest margin. Several independent variables were included concerning both bank-specific and macroeconomic and industry-specific characteristics which have not been considered in previous studies. In addition, the sub-sample between 2008 and 2011 was considered for comparative analysis.

Findings

The authors concluded that the independent variables selected, with few exceptions, behaved accordingly to what was expected.

Originality/value

To the best of the author’s knowledge, this is the first attempt to examine determinants of banks’ profitability in Portugal, both internal and external, using time series data, which have not been considered in previous studies.

Keywords

Acknowledgements

UECE (Research Unit on Complexity and Economics) is financially supported by FCT (Fundação para a Ciência e a Tecnologia), Portugal. This paper is part of the Strategic Project (Pest-OE/EGE/UI0436/2014).

Citation

Garcia, M.T.M. and Guerreiro, J.P.S.M. (2016), "Internal and external determinants of banks’ profitability: The Portuguese case", Journal of Economic Studies, Vol. 43 No. 1, pp. 90-107. https://doi.org/10.1108/JES-09-2014-0166

Publisher

:

Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

Related articles